Nolan Accounting Center


4262 South 108th Street

Greenfield, WI 53228


Phone: 414-425-5690

Fax:     414-425-2373



June 2023

Ordinary and Necessary Business Expenses

Delivery man holding cardboard box and unloading parcel for delivery. Top view of courier unloading parcels from van. High angle view of man removing packages for the delivery.

All businesses can deduct ordinary and necessary business expenses from their tax return. But be careful — it’s not black and white.

Deductible business expenses aren’t uniform. An ordinary business expense for a dog walking business certainly wouldn’t be ordinary for a bakery.

Think of it like this. What expenses are unequivocally needed to run your business? A dog walker needs dog treats and leashes. But a bakery doesn’t.

Several types of expenses tend to occupy the gray areas. These include business meals, automobile expenses, travel, and capital expenditures. Without clear-cut rules, don’t blur the lines between what’s deductible and what’s not. A lunch with a customer is a business expense. But lunch with your spouse or child likely isn’t. Travel to an industry conference is an ordinary expense. However, a trip to the Maldives, where you spend a few hours planning your company’s future, doesn’t count.


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